Resistance(Resistance) A Beginner’s Guide
Resistance is an area where an asset may encounter relatively strong selling pressure as its price rises, and is often viewed as a “ceiling” above the price. It can be drawn based on historical highs, but it is not necessarily a reliable predictive line and should not be used as the sole basis for trading.
What is resistance?
Resistance Resistance refers to a situation where, after an asset’s price rises to a certain area, strong seller supply and selling pressure make it difficult to break through further. It is often described as a “ceiling” above the price; crossing this area usually requires sufficiently strong buying demand. Larger sell walls sell walls may also form or reinforce this barrier.
How to identify and draw it
Technical analysis typically uses past highs to draw resistance lines and observe where the price may reverse. Resistance lines are usually horizontal, but they may also be diagonal; diagonal lines are generally called trend lines. When drawing one, at least two historical highs should be referenced, while three or more points are preferable. However, adding reference points cannot guarantee a correct assessment.
Changes and limitations after a breakout
When the price breaks through resistance, that area may turn into a support level support level, providing support against subsequent declines. Resistance and support are not absolute barriers, and relying on these lines alone to assess risk is hazardous. During learning, treat them as auxiliary observation tools and combine them with fundamental analysis and other technical indicators for comprehensive judgment.
Original Tutorial
https://www.binance.com/en/academy/glossary/resistance
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